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Flows Into Domestic Equity Mutual Funds Hit Highest Since Pre-February Correction, Year To Date Flows Still Negative
The Investment Company Institute notes that the week of March 17 saw the largest inflows into domestic equity mutual funds since just before the February correction. At $1.6 billion, the inflow was the second highest in 2010, and only topped by the January 20 number of $2.2 billion. Yet the year to date number is still negative by a large margin at ($2.6) billion, even as the market has risen by 3% since the beginning of the year. The money to push the market higher has certainly not come from domestic equity mutual funds. And as we pointed out in the most recent TIC analysis, foreigners had sold a record amount of Corporate Bonds in January, likely translating in a lack of desire for US equities as well. Where did the demand come from? Why primary dealers, who continue to acquire zero interest Bills and use the proceeds to purchase stocks in a continuation of the Fed-funded carry trade.
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Once the dumb money is back in the market, it'll be time for another "extraction sequence". I wonder how far off it is?
I will take a stab....I think that we are 6 months away. However, the fact that the eyes of most are veiled, "they" may choose not to "crash" (is "crash" even a valid term anymore?) the market in 24 months. Either way, wealth is (supposedly, still....STILL?) relevant to the doelarr, and so how the hell will anyone hold and maintain their wealth, let alone make "monies"? Cough, GOLD, cough, SILVER, cough, cough.
Yup, even retail money will be looking for yield, and stocks are the only place they'll find it. The Fed's great reflation experiment is working thus far. Stay long stocks/ corp. bonds.
What, exactly, are they reflating? A stock bubble? Not something I want to chase.
I hear ya, but talk to me in a year's time. I heard the same concerns last March. Retail money was too scared to buy then, just like pensions, and now they're stuck chasing indexes higher. End of the day, stocks will grind higher, and pullbacks should be bought. They're going to pull out all stops to reflate this sucker. Watch.
Are you also going to ring the bell? Just asking
Leo, by what metric are stocks the only place to find yield? The dividend yield one the S&P 500 is 1.8%, a 5 year low. 1.8% for all the risk associated with equity ownership historically, PLUS the added risks specific to this period of time. In February 2009 the dividend yield on the S&P was 4.5%. The dividend yield on the S&P 500 is half what it was in the early 90s during the S&L crisis.
I know, I know, lets ignore the fact the stocks in fact yield next to nothing (and arguably less than nothing risk adjusted) because the fed or whoever "wants" asset prices to go up, so they will, and this brilliant gem should inform one's investment decisions, not absurd nuances like numbers.
Are you suggesting that reflating a stock bubble is a good thing? That it won't burst again? I really don't know what you think is going to happen, Leo.
agree, no stopping it. QE ending though, in 5. . .4 . . . 3. . .
"....2....1.....2.....3....4....5....WOOPS!" BS smiles, opens up his Principles of Micro Book and reads, "Cost-BENifit Principle: An individual, as in me BS Bernanke, or Firm or a society, should take an action if, and only if, the extra BENefits from taking the action are at least as great as the extra cost. Well then, I think I will keep my head a little longer!" He sets down his book, and rolls up a skinny "j".
You really are a total fuc*ing idiot! No wonder your BS posts always have flags!
Pedal to the metal. Three trading days til quarter's end and record bonuses. Like sliding into home plate without any possibility of being tagged out.
It all makes perfect sense.
Would you TD clarify your statement re primary dealers acquiring zero interest bills and using the proceeds to... I would like to know what other assets that one may both acquire and receive proceeds.
more masterful analysis the old "stocks will go up because stocks are going up" routine, i can only guess at the years of backbreaking analysis that went into this - makes you wonder when you have insights such as these, so non-consensus and insightful, why even bother sharing them, just sit back and print money for yourself
March 29 (Bloomberg) -- Birinyi Associates Inc. raised its year-end forecast for the Standard & Poor's 500 Index to 1,325 because of rallies by General Electric Co., Citigroup Inc. and Microsoft Corp.'s shares.
The estimate from the research and money-management firm founded by Laszlo Birinyi implies a 14 percent advance from last week's closing price and a full-year increase of 19 percent.
Today's report cited 2010 gains exceeding 20 percent for GE and Citigroup as well as Microsoft rising above $30 last week.
Birinyi said the S&P 500's reversal of losses on March 22 shows that markets are exhibiting strength. The benchmark index for U.S. stocks lost as much as 0.6 percent after the biggest overhaul of the health-care industry in four decades and concern about Greece's budget deficit, as well as Tiffany & Co., the world's second-largest luxury jewelry retailer, reporting less profit than the average analyst estimate. The S&P 500 rose 0.5 percent that day and went on to advance a fourth straight week.
Calm before the storm next month. They won't announce the top. It will come on something trivial and "well-understood" by traders. Then the selling won't stop.
All ponzis end the same way.
The Squid must be licking it's chops by now.
Remember that most folks who bought in March 2009 have now completed one year of "long term" holding stocks and now eligible for long term taxation when they sell. They would be more inclined to sell now at a lower tax rate. Just an ignoramus's thoughts....
And what with TD talking about the Fed wanting to see rates drop big time so they can refi their debt wonder what will happen next.
Really, I have no worries about the issuance of Dollars a) under normal circumstances or, b) in order to support a demand for risk-abatement. But I can't for the life of me, see why so many billions need to be introduced. Because when all is said and done,itisn't the capitalmarkets which are under duress. As far as I know, corporate numbers are unpleasant, Sovereign balances are typically short, it is the Banking sector's perception of risk that stands out as being of consequence. At least it did, some while back now.
Someone, somewhere, the other day mentioned that we had a negative multplier on Credit infusion ($1 added causes a declines in value by .45c). I think it would bwe fair to say that the nature of this crisis is causing quite damaging repurcussions in wages, (basic) consumption, and by extension, construction and real estate. I find it strange that the crisis is allowed to play out within the labour market, which is consumption, but not on the money side. That seems to be a case of left hand not knowing what the right hand is doing. It's like asking a Math teacher to explain the beauty inherent-like in a piece of Literature: it can be done but, you know what I mean?
We really do have a very serious issue with unemployment and while the Banks have the Fed to help them out, the ordinary population have the government. Who, I really wouldlike to point out, have been on television every night since it's inception -pretty much in order to suggest that 'when the crap hits the fan, they're the people tasked to sort it out', yeah, or no?
Either get off the television or, sort this out. yeah, thanks.
IS IT TIME?:
http://williambanzai7.blogspot.com/2010/03/blog-post_29.html
NO!
Mutuals are carrying about 3% cash--
Can't imagine how many seconds it would take to hit the margin-if there was a dash for cash--
(not sure) but i think because--you only have shares "of the Fund" and not shares of the stocks-"within the Fund"--that-in a cash squeeze-they have the option to just issue you more of their shares--
Trying to dump them into a no bid market-could be a bit unsettling--
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